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The End

May 3, 2011
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The End

At the start of this blog, I predicted that the financial crash would cause the government to spend huge money bailing out the people who caused it, adding a great deal to the national debt and sparking a crisis of confidence in the country’s ability to repay it, which would lead to a policy...
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Financial Reform Bill is Done

June 25, 2010
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Financial Reform Bill is Done

As expected, the bill contains no curb on too-big-to-fail institutions.
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Derivatives and Computers

May 10, 2010
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The Times has a pair of stories today that are fun to set next to each another. The first one is about lobbying on the financial reform bill. Banks don’t want to be thrown out of the derivatives market because that’s where the profits are. Watch for Sen. Blanche Lincoln (D-Arkansas) to get pilloried...
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Goldman Fraud Is Not Goldman’s Alone

April 19, 2010
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Something that occurred to me as I learned of the Securities and Exchange Commission’s civil fraud suit against Goldman Sachs Friday (this New York Times piece has a link to the complaint): Who was buying mortgage-backed paper in mid 2007 and what were they thinking? Anybody whose skull wasn’t filled with oatmeal knew by...
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The New Republic Raises the Right Questions

February 25, 2010
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Read this. In examining President Obama’s pledge to (finally) take on financial services reform, and Paul Volcker’s prescription for ending too-big-to-fail, Peter Boone and Simon Johnson, writing in The New Republic, take note of something that until now has mostly escaped the notice of us financial commentators: “Market Power.” Consider: As a result of...
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Greece and Goldman: Sowing the Wind

February 16, 2010
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On Saturday night the New York Times posted an interesting piece on Goldman Sachs’ connection to the unfolding Greek tragedy. For those who have missed it, for the past week or two capital markets have been fretting over what they cheekily call “the PIIGS”—Portugal, Italy, Ireland, Greece, and Spain. The operative concern is too...
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Securitization’s First Wave of Failures

January 29, 2010
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The NY Times’ Floyd Norris has a column today about a surprising paper just out at the National Bureau of Economic Research. Turns out those securitized mortgage derivatives that sank the economy two years ago were not new. They were just like the ones that triggered the Great Depression. Norris: The original wave of...
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The Maryland Millionaire Count, Tax Scams, and Train Wrecks

November 25, 2009
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The Maryland Millionaire Count, Tax Scams, and Train Wrecks

Your tax dollars at shirk | Image by Win McNamee/Getty Images via Photo Journal The Sun has some predictable drivel today regarding the state’s all-important “millionaire” head-count. Seems it’s gone down. By 30 percent! And this is a terrible thing! And it’s all because of taxes and Democrats! Goddamn Democrats. As the Sun reports,...
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AIG Is Getting Its Money Back?!

October 29, 2009
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AIG Is Getting Its Money Back?!

The Wall Street Journal has an interesting story today explaining that AIG has gotten back several billion dollars in collateral it posted last year against losses in the credit-default swap market. But, most of the “bad” contracts, which now look not-so-bad, were “closed out” by the government bailout, meaning that AIG lost that money...
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Frontline on Derivatives

October 21, 2009
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Watch Frontline‘s historical retelling of the roots of the financial crisis. Yes, folks, it’s derivatives, and Brooksley Born, the former head of the Commodity Futures Trading Commission, fought the good fight, trying to get them regulated and transparent, in 1998. The usual suspects (Rubin, Summers, Greenspan) shot her down. “They were totally opposed to...
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Greenspan Changes His Mind

October 15, 2009
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Alan Greenspan has changed his mind, proving finally that he has one. As Bloomberg reports, Greenspan told the influential crowd at the Council on Foreign Relations yesterday that the too-big-to-fail doctrine must end: “If they’re too big to fail, they’re too big,” Greenspan said today. “In 1911 we broke up Standard Oil—so what happened?...
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“The whole system was tilted into pushing people into these subprime loans.”

September 2, 2009
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Michael Greenberger, Rock Off Crew, Robert Strupp, and many other Baltimore folks are featured in a video clip viewable on Amy Goodman’s Democracy Now! site It’s a preview of Leslie and Andrew Cockburn’s new documentary, American Casino, which illustrates how credit default swaps and other derivatives sank the economy—and how a few pols (cough,...
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